New EPA methane rules combined with low oil prices signal disaster for stripper well producers

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National Stripper Well Association Chairwoman Darlene Wallace said the new rules, on top of historically low oil prices will cripple stripper and marginal well owners and operators. 

OKLAHOMA CITY – Today the Obama Administration’s Environmental Protection Agency (EPA) released the first Clean Air Act regulations that directly limit methane emissions from domestic oil and gas operations. The National Stripper Well Association (NSWA) fought for an exemption of small producers from the effects of these rules, but today the exemption for low-producing wells was eliminated. 

“These new rules will cripple stripper and marginal well owners and operators, and on top of historically low oil prices, we are looking at total disaster,” said NSWA Chairwoman Darlene Wallace. “By requiring the addition of new costly equipment requirements and expensive leak detection the economics within the oil and gas industry as a whole will be fundamentally changed, severely and forever.” 

Wallace said, the President has already committed the United States to be “fossil fuel-free” by 2100 and the overwhelming goal is to drive the nation in that direction. However, during this time of record low prices, the President’s focus on pushing more expensive and costly regulation will continue to harm jobs and our economy. 

The methane rules imposed on the oil and gas sector are designed to provide the President support and backing for a significant U.S. commitment to fighting world climate change, Wallace said.

“But this plan is a direct attack on small producers with massive costs to the states and industry in exchange for little or no reduction in methane emissions. Instead of finding ways to harm working Americans, the President should focus on supporting domestic industry and energy production, which is a jobs-creator,” Wallace said.
Tim Charters, NSWA Vice President of Governmental Affairs, said the EPA process started with the 2014 White House strategy on methane emissions, but was significantly exacerbated by the stated goal of cutting methane emissions by 40-45 percent from 2012 levels by 2025, regardless of the costs or economic impacts.

Charters pointed to a December 2014 report by Energy in Depth, based on EPA data which found that the oil and gas industry made, and continues to make, real quantifiable reductions in methane emissions without government intervention.

“Specifically, EID said, ‘methane emissions from some of the most prolific shales in the United States have fallen considerably. In the Utica and Marcellus shales, methane emissions fell by 55 percent and 10 percent, respectively. The San Juan Basin reduced methane emissions by six percent. In the western Oklahoma Anadarko Basin, methane emissions decreased by 34 percent,’” Charters said. 

The state of Texas, a leading energy-producing state, saw substantial reductions in methane emissions. In the Permian Basin, a major area for stripper well oil and gas producers, methane emissions decreased, voluntarily, by nine percent, he said.

Wallace said, “All these emissions reductions have taken place at the same time as U.S. production of natural gas has grown more than 40 percent since 2006. One would imagine that in a world where production is up and emissions were down that the administration would spend their time and energy focusing on other priorities. However that is not the case.”

“Federal agencies like EPA should be aware of, and held accountable for, the economic damage done to small producers by forced compliance with regulations that simply shouldn’t apply to stripper well producers,” she said.

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